I. The Various Approaches

The purpose of the following pages is to consider the social aspects of the economic development of Latin America. But no sooner is this statement set down than we are in danger of being overwhelmed by the avalanche of words written and spoken on the subject at the present time. This abundance is bound to give rise to perplexity, for it shows that we are up against a controversial problem. And, for dealing with a controversial problem, we have to choose between three possible ways: to accept it resignedly as it stands and contribute without more worry to its perpetuation; to try to penetrate to its fundamental and therefore hidden hypotheses; or to endeavor to bring at least a little order into the confusion of its diverse implications. We cannot surrender to the convenience of the first of these courses, nor, nowadays, succumb to the fascination of the second. The only wise and feasible course is to face the requirement of clarity inherent in the third.

This means that, at the outset, we must recognize the extreme ambiguity of the expression "social aspects of economic development". the literary recourse of a specialist wishing to collaborate harmoniously with other scientists and entering at his own risk on admittedly foreign territory, it is justified. But, taken literally, it leads to the dangerous inference that the term "aspects" may be taken as indicating mere epiphenomena or, even worse, secondary and even incidental matters. Again, if the noun is ambiguous, the adjective in no less so, and may be so familiar as to be overlooked, although there has of late been some criticism concerning the frequency with which social questions are presented as mere adjuncts to the economic. This presentation labels the subject as a side issue and makes a right understanding of it even more difficult.

However, the basic requirements for a right understanding are neither unknown nor difficult. We need only recall a commonplace of scientific methodology: the subject society and economic development" (like anything relating to human life) can be approached from a variety of standpoints, and in principle none is unjustified or wrong; all that can be said is that some are more appropriate than others. But the degree of their appropriateness is determined by what the scientist is concerned with at the time, or in other words, the nature of the problem to be solved. Let us, then, briefly examine our subject from the main standpoints.

A. The Exigencies of Praxis

The key to a preliminary classification of these standpoints, which may subsequently be found to merit further subdivision according to different shades of meaning, is found in the primary consideration that governs them. In other words, we must ask ourselves whether the exigencies of praxis predominate, or the exigencies of knowledge. The predominance of the exigencies of praxis is evident in the direction followed by traditional social policy, motivated as it was by flagrant deficiencies in the life of society. A subject which in its early days had only a limited compass —the "social question" as known in the last decades of the nineteenth century— has expanded to include the whole range of the "social problems of a country", that is to say, all the inadequacies and mal-adjustments in its structure. Social reform, social welfare, social policy, are the varying names given to this activity in different countries and at different times, and many people mean nothing more when they speak of the social aspects of economic development: education, health, social security, family living standards, etc. —which explains why these aspects are taken to be "accessory".

1. Economic Investments and Human Investments

In observing the evolution of social policy, we have to reflect for a moment on the fact, clearly brought out by its history in Europe, that the humanitarian aims of social policy must be considered in relation to the purposes of economic policy or, we might say, the possibilities of a given economic situation. In other words, what is now a matter of planning in the less developed countries previously existed as a problem in the more industrialized countries, and the new factor in planning—deriving from the idea of deliberate development—has been expressed (in its simplest logical terms) as follows: any economic development implies a process of continued and successive investments. Now it may happen that not only economic investments in the strict sense, but also what have come to be called human investments, play an important part. Bolivia needs investments in its oil and its agriculture, but there is no denying that the economic development of that country is equally dependent on an improvement in the nutrition and health of its inhabitants and on a rapid "hispanization" of the indigenous sectors of the population. The emergence of this category of "human investments" has endued the problem with a technical character and enabled it to be included within the compass of programming and planning. But, as happens with any advance in rationalization, there is also a darker side to the picture. The greatest success has been in strengthening the conviction that economic development is a comprehensive social process and. consequently, in setting a new problem for human effort and imagination: that of making social planning coincide with economic planning. The negative (or at least problematic) aspects consist, on the one hand, in the excessive emphasis laid on a Utopian element—balanced development—as an objective, and, on the other, in the resultant (though perhaps unintentional) diminution of the humanitarian character of traditional social policy, which, in its finest expression, is, above all, an endeavor to remedy human injustice and suffering.

The underlying aspiration in the formula "balanced" economic and social development is based on two specific conceptions: (a) that there are investments of a social nature which sooner or later prove profitable from the economic standpoint or which exert a positive influence in the direction of improved future productivity; and (b) that in any development plan there should be a definite ratio—both on humanitarian ground and from the point of view of yield—between economic growth and social improvement or progress, although this may be only one of the various aims to be pursued.¹ The requirements concerning integration and ratio do not seem to be discussed, whereas the notion of balance seems nowadays to receive a great deal of attention.

The first objection has already been mentioned: the idea of balance brings a Utopian element into the conceptions of development, which gives it an "ideological" nature (in the technical sense), and this is incompatible with serious scientific study.

The second objection is that this attitude prejudices the very theory of economic development; in other words, some people maintain that is very problematical whether economic development can proceed in a balanced form and that, on the contrary, its mechanisms consist of a series of successive states of imbalance, each giving rise to increasingly complex and fruitful situations.

In addition, the transformation of the aims of social policy into "human investments", while to some extent legitimate, might lead to a dangerous error: that of considering such aims as functions coming definitely within the scope of economic development, which they certainly are not. The deficiencies which social policy has to face in the form of human problems are in principle independent of any economic repercussion and must be remedied at the level of what are regarded as permanent, paramount values. And, unquestionably, the first consideration must be the relative urgency of the problems.

This is obvious in regard to those that are of tragic urgency—poor and overcrowded dwellings, persistence of conquerable diseases—but it is nonetheless true of others for which more time may be allowed. Education is an outstanding case. A country's educational situation is of great importance to its economic growth; educational and economic indices are convergent, and any plan for economic development will show the occupational gaps that need to be filled by means of education. But education cannot be regarded as a mere function of development. It is independent in its aims and traditions and in its ultimate preoccupations, that are concerned with man as a being and are related, not so much to development itself—a neutral and intermediary mechanism—as to the kind of society to which development aspires or which it is intended to produce.

Furthermore, the deficiencies which social welfare corrects are typical examples of imbalance, and there can be no certainty that correction of them will not lead to other later manifestations of imbalance. Every "reform" and every improvement has its own special "social costs". It is not always an easy task to determine. them, nor do we always see courage such as was shown at the end of the last century by some social Darwinists, who were inexorable in pointing out certain selective consequences of medical progress. It is these costs—secondary consequences—of intervention in the biological and psychological conditions of man that make it in principle impossible to compare social planning with economic planning, and make it difficult to imagine, for instance, a table of input and output of a combination of human factors.. Nevertheless, the need for joint social and economic planning is a stimulus to creative imagination and, within certain limits, progress in this sphere may perhaps be possible in the near future. Everything suggests that the way will be found in so-called "operative research" and that the application of its techniques to social "decisions" may provide at least an efficient guide. But this is a task for the years to come; and, in any case, the difficulties in the way of a qualitative evaluation of the variables involved will mean that (even more than in the economic field) technical advice must ultimately yield to political "decision".

2. Typologies as Instruments for Knowledge and Action

In the study of the social aspects of economic development, the exigencies of praxis have thus led to some highly theoretical planning. But even before this level is reached, other theoretical conclusions arising from initial attitudes based on pure knowledge are to be found, in similar contrast to the practical consequences (as we shall see later), as though reality wished to demonstrate once more the relativity of intrinsically sharp differences of conception.

In order to obtain an exact determination of "social deficiencies", it is necessary to be able to make use of quantitatively precise indicators or indices. For this reason, the need to possess, at the international level, homogeneous units for measuring standards of living in different countries recently led a group of specialists to establish a table of the main indicators, which now serves as a basis for the work of the United Nations.

It is important now to see how these and other indicators have been used in other countries, in order to find an answer to a theoretical question: that of the building-up of a typology of the economic and social situation in Latin America. There was a patent need for such a typology, in order to put an end to the danger of generalizations applied to the whole region: there were various ways of achieving this end, but the one adopted so far is undoubtedly original, in that it provides a link between the pure exigencies of praxis, which social policy has to face as a matter of urgency, and the desire to reach an interpretative understanding of economic development as the essential preoccupation of the sociologist.

Two valuable attempts to compile such typologies are already available to those interested. The authors themselves are the first to point out certain problematical aspects; but it would be inappropriate here to use their words as a starting-point for a major methodological discussion, which would have to begin by analysing the distinction now currently made between indicators and indices (Lazarsfeld).² Suffice it to note a few points. In the first place, we have the question both of the "fidelity" and of the validity of the indicators selected; and, secondly, the question of the degree to which they converge, and of their significance. When there are very few indicators, the convergence is, of course, clear, but not when there are many. Thirdly, there is the question of the attribution of causes; the convergencies or correlations in themselves tell us nothing with regard to the causal connexion between the factors measured, and, finally, this is the most important point for purposes of interpretation. What are the reasons for the correlation, almost obvious in itself, between education indices and development indices? The problem of causes is still further complicated, of course, if many indicators are used.

However, these remarks in no way diminish the value of the results achieved by the typologies mentioned. That produced by Father Roger Vekemans³ is highly instructive for two reasons: because in his tabulation of countries he succeeds in showing how, by the mere action of the indices, conclusions are reached that are very similar to those which would be obtained from another kind of experiment—which amounts to a relative confirmation; and also because he throws into relief the further step required with regard to these typologies—to interpret them. The clearest case (to which reference will again be made later) can be formulated in the very words of Father Vekemans, and it undoubtedly constitutes the most difficult problem of historico-sociological interpretation which the Latin American scene now presents. Indeed, how are we to explain the difference in the situation of the components of Group IV (Mexico and Brazil) in relation to that of Group VI (Argentina and Chile, in particular)? How are we to interpret the fact that the two countries of the southern cone, which offer a relatively high economic and social complex, are none the less experiencing "a certain stagnation"? In other words, how are we to explain in this case the lack of convergence between the socio-cultural indicators and the indices of economic growth? It is from there that interpretations begin, and they may be of various kinds.

B. The Exigencies of Knowledge

The practical needs in the matter of social policy in Latin America are so urgent that the legitimacy of the point of view we have considered, which derives its impulse from them, is self-evident. But this is not the only point of view, nor perhaps is it the one best adapted to meet the exigencies of knowledge. Here, the "social aspects" of economic development necessarily take on a very different character; it is no longer a question of social "deficiencies" or human investments, but of looking at the economic process as a part of the whole social situation to which it belongs. In this sense, just es in recent years economic science has been obliged to work out, wholly or partially, a theory of development (a subject which formerly had not received preferential attention (or at least not explicitly), so also sociology has found itself compelled to face the question whether it, too, could have something to say in the matter, either with the help of the economist or independently. the neatest solution would be one single theory. Scientifically, But, failing that, it was hoped at least that the sociologist would be capable of working out a sociological conception of development, that is to say, a theory evolved from the standpoint of the social structure as a whole. And, just as the economist offers, or can offer, models for development which are at least a clear guide for practical tasks, so also the sociologist has been asked to provide models for the structural processes that accompany or precede the economic process.

These exigencies of knowledge, which have now reached their apex, began in a more modest way. It is significant that the earliest efforts to deal with the question gave preference to the study of "conditions" or of social "obstacles" to economic development. Here, the concern to point out the obstacles again defers consideration of the urgent practical problems and gives rise to something like resentful impatience on the part of the economist in the face of hindrances to his work. But as, finally, obstacles are nothing more than a vacuum in the system of conditions, the theory, keeping to its principles, attempts to confine itself to conditions.

1. The Analytical Point of View

Economic sociology, which has not been the subject of much systematic study, is now deriving considerable stimulus from the preoccupation with development. It is not surprising that economists and sociologists are now looking beyond the institutional framework of pure economic action and are studying economic institutions in themselves; property, division of labor, the employment pattern, as well as the forms of exchange and the social conditions of the various markets. And there is similar interest in the motives governing economic policy in respect both of production and of consumption. Once analyzed, the economic institutions have to be related to other institutions, so as to see how they all function in the social structure as a whole.

With some variations in enumeration and terminology, this is the basic plan suggested by the recent contributions of economic sociology, prompted by the awakened interest in the subject of development. If a factual analysis is to be made, of a country or a region—Ecuador or Latin America—all that is necessary is to apply, according to the case, either all or part of the arsenal of devices that make up the above- mentioned set of concepts. And the analysis will be more static or less so, more dynamic or less so, according to the extent to which the functional process is brought to light. Needless to say, this is the scheme which also, implicitly, serves as the guide in most cases for all known plans for empirical research of any serious value.

As all this takes time and is not yet at the stage of a definite program, some attempt has been made here, too, in regard to urgent practical needs and immediate aspirations, to press on and meet the requirements alike of theory and of practice. Reasoning has been along these lines: from the standpoint of development or, we should perhaps say, of speeding up development, not all the institutional elements analyzed by economic sociology are of equal value. Some are certainly more important than others. In view, then, of the need to make a selection from among them, which are the most decisive? Or, in military parlance, which are the "strategic" social elements in economic development? What can be done to influence them favorably?

The desire to answer this question results in the production of an outline for a study, in which three basic points claim pride of place by reason of their strategic value:

1. the general economic disposition, as a basic index of the dominant economic tenets and aptitudes
2. the capacity for organization and innovation in economic affairs, which is not well described by the classic but ambiguous term "entrepreneur"
3. the capacity for successfully carrying out economic tasks

Action can be taken under each one of these headings, with a view to promoting more dynamic activity. What is the real situation in Latin America, and by what means can these strategic elements be influenced? The study of them, therefore, has the same function of providing a bridge, a transition or link, as that formerly assigned to the typologies, but the other way round. The former was designed to meet practical needs in what was at the outset a purely theoretical question; the latter conduces to the building-up of a theoretical structure upon what was at the beginning a plan for immediate action.

To endeavor to outline here the extensive content of all that is implied in the basic scheme for an analytical approach to the so-called "social aspects of economic development", would be to repeat what has been done elsewhere at other times. Still less, of course should a full and systematic exposition be attempted. However, so as not to abandon the analytical plane entirely and to give a little substance to the preceding abstract considerations, it is perhaps advisable to look at the various analytical schemes produced by the economist and translate their sociological implications into other terms. A recent study of the structural weaknesses in the Latin American situation, brought out as a supplement to a more specific investigation,⁴ affords an ideal support for these suggestions, without need to verify whether all economists agree with its conclusions. Moreover, here we are only concerned with indicating the most marked of the characteristics which constitute (according to the reader's choice) either obstacles, or negative social conditions, in the Latin American.economic situation. The schema of this analysis keeps to the most strictly uraditional lines followed by the "economist" and, for the sake of brevity, from now on that term will be used to cover everything relating to the content of his work.

As regards land, the economist provides data showing the inequality of distribution; and the mere fact of the continued existence, in sharp contrast, of vast rural properties (latifundios) side by side with small holdings (minifundios) permits the first sociological deduction or hypothesis of importance to be made: the virtual non-existence of an agricultural middle class of any significance. This explains the tendency towards the formation of a considerable rural proletariat, as soon as systems of production are modernized in one way or another.

With reference to capital, the scarcity of which, in its strictly economic sense, is well known, the economist stresses the fact that, nevertheless, the shortage is perhaps greater as far as social capital is concerned. The social infrastructure is of course wanting in medical services and housing, but especially education.

Concerning labour, there are no problems in respect of over all supply, but there are marked shortages in skilled labour and in manpower at the supervisory level. The economist suspects that the ability of the workers is not so high as is claimed, and points out that the immobility of the labour market is largely due to general ignorance of employment opportunities. In fact, the economist is simply drawing attention, in one way and another, to a single and decisive social factor: knowledge and general unpreparedness. In referring specifically to the situation of the professional and administrative grades, his complaint is the same and so are the causes he cites. The weakness in the higher ranks of the labour force is parallel to that of the supply of capital; the number of technically trained persons in the productive sectors is very small, and the entrepreneurs have had little training.

In the very complex matter of deficiencies in public administration, the economist points to the organizational and fiscal factors to which they are partly due, but again emphasizes as their ultimate cause the weakness of the educational system and the consequent inefficiency of the selection procedures.

With regard to entrepreneurs, although the economist acknowledges that there have been and still are considerable groups of entrepreneurs in Latin America, he nevertheless considers that their number is insufficient. For this, he adduces some interesting reasons. The first concerns the limited supply, due to the social structure; the second refers to the difficulties in the way of setting up new industries, due especially to the economic structure, that is to say, to its monopolistic features; and the third, of a psycho-social nature, relates to expectation of profit. should be noted that the entrepreneur is referred to, throughout, in the traditional sense of the term.

Although the data on distribution of income are not very abundant and are not systematically analysed, the patent fact of inequality stands out. There is inequality between the various economic sectors, in distribution among the various social strata and no less, between the different areas or regions of a single country. Lastly, although not much is known about consumption "propensities" or about the composition of the family budget, sufficient data have become available in recent years to allow one to suppose that it is gradually rising and that Engel's law applies.

This sociological interpretation of data provided by the economist could be extended further, but what is gathered into the foregoing very brief summary will suffice. The data are of interest in themselves and each constitutes a starting-point for a sociological exposition. But we are not concerned with that now; our task is to show where the views of the economist and the sociologist converge on the analytical plane. If we had followed the thread of some sociological analysis, we should have met with more or less the same phenomena, although it is natural that those singled out by the economist are those to which is ascribed the strategic value mentioned above.

2. The Historical Point of View

The analytical approach to the social aspects of development, be it that of the sociologist or of the economist, amounts to a cross-section at a particular moment in time, and is therefore dated. But it is very possible that the exigencies of knowledge cannot be satisfied by a synchronous study of this kind, to borrow a term from the modern anthropologists. The historical entity of Latin America in 1961 is something more than the components of its economic-social spectrum; what is can only be fully understood through what has been. What is it that has made Latin America what it is today? And could this have been brought about in some other way? Economic development is one of the components of her present situation, which is conditioned by a series of previous situations. And all of them, past and present, far from being hermetically sealed off from one another, constitute parts of the whole historical process and are open to its many influences.

Now this historical consideration is by no means merely a complement required by the points of view previously. described. On the contrary, it is their raison d'etre, their real justification. The most highly developed research techniques, the most rigorous analyses according to category, the most careful typologies, are no more than the instruments of a deep concern about life, a desire to understand what is happening here and now in a living situation, of which we are a part and whose future depends to some extent—however small—upon ourselves. In a study of the social aspects of economic development in Latin America it is essential to try to understand how they came to be what they are, and therefore to engage in an exercise, whether modest or extensive, in historical sociology, And for this it is not enough to be content with so-called social history (much of which has yet to be written) although elsewhere it is beginning to combine the best methodological elements of history and social science. Decisive as it may be, it is insufficient, for the social process is only one of the streams in the historical current as a whole. What the Latin American has made of himself—his spiritual attitude and response to life—the happenings in his political struggles and the situations he has encountered have their influence at the present time, in the historical environment in which he is now placed and is striving to frame his aspirations for the future.

Notes

1. It is often advisable to back up one's own opinions by the recognized authority of the opinions of others. In this connexion I propose to make use of a clear statement of the case by the Berne professor Dr. Richard F. Behrendt (Die wirtschaftliche und soziale Revolution in der unentwickelten Landern, Berne, H. Lang, 1959).

   In any attempt to formulate the necessary criteria for priority in development planning, a distinction should be drawn between the following three problems:

   1. The problems of the proportion between strictly economic improvements and social improvements.
   2. The problem of the proportion between, on the one hand, numerical considerations (Rechenhaftigkeit) concerned with achieving the maximum yield through the use of the best technical process available, and, on the other, the deliberate planning of a gradual and lasting development which takes account of social continuity and stability. In the latter case it is important to avoid, as far as possible, over-abrupt breaks with the traditions and institutions of the environment in question, since this may well give rise to insecurity and conflict - psychological, social, political and even material.
   3. The problem of the proper proportion between primary, secondary and tertiary activities and sectors.

   Therefore, if recourse is had to certain academic divisions, it will be recognized that: (a) the first problem is particularly the concern of specialists in social policy or welfare; (b) the third belongs unquestionably to the sphere of activity of the economist; (c) the second, on the other hand, relates particularly to the main preocupations of the sociologist and the statesman. However, no one would deny the right of any person, by virtue of exceptional training, to concern himself equally with all three problems.↩

2. See Henri Guitton, "Indices e Indicadores", Revista de Economia y Estadistica, University of Córdoba, Year IV, Nos. 1,2,3, and 4.↩
3. See R. Vekeman and J.L, Segundo, "Essay of a Socio-economic Typology of the Latin American Countries", in: E.de Vries and J.M.Echavarría (eds.), Social Aspects of Economic Development in Latin America, Vol. I, Paris, Unesco, 1963.↩
4. I refer to "Caracteristicas de la Economia Interna y su Desarrollo, 1929-59″ (E/CN.12/563), prepared by ECLA, containing a brief outline and analysis of the various works recently brought out in this connexion by the Secretariat.↩